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A Landmark Win for Implementers on FRAND Obligations in Platform Licensing
A Landmark Win for Implementers on FRAND Obligations in Platform Licensing
28 July 2026
Series
Blogs
28 July 2026
Tesla, Inc v InterDigital Patent Holdings, Inc and others [2026] UKSC 27
The UK Supreme Court has handed down a landmark judgment unanimously allowing Tesla's appeal in its standard essential patent (“SEP”) dispute with InterDigital and Avanci concerning FRAND obligations in the context of patent pool/platform licensing.
The case is relevant to Tesla’s proposed launch of 5G-enabled vehicles in the UK and concerns its need for a licence to relevant UK SEPs. InterDigital, which owns a global SEP portfolio including relevant UK patents, makes licences available through the Avanci 5G platform, which offers implementers a single licence covering patents contributed by multiple SEP owners. Tesla has challenged the Avanci 5G platform fee as not being fair, reasonable and non-discriminatory (“FRAND”) in accordance with InterDigital and other licensors’ obligations under the European Telecommunications Standards Institute (“ETSI”) IPR Policy and seeks declarations to this effect (“the Licensing Claims”). Avanci and InterDigital challenged the jurisdiction of the English courts to hear these claims.
Following a defeat at the High Court and Court of Appeal (Arnold LJ dissenting), Tesla’s appeal to the Supreme Court was heard in April of this year (for further details of the Supreme Court hearing, see our earlier summary here). The resulting decision unanimously allows Tesla's appeal, resolving a series of important questions about whether implementers of technical standards can proactively bring proceedings in the UK to challenge the FRAND status of licensing fees charged through a patent pool or platform. The Court held that there are serious issues to be tried as to the application of the FRAND obligation to a platform/pool licence and as to whether, in respect of InterDigital’s UK SEPs, a FRAND licence would be a licence to the Avanci 5G platform at a FRAND rate. The Court held that Tesla has a real prospect of being granted the declarations it seeks against InterDigital and Avanci. It also held that the English courts have jurisdiction to hear the Licensing Claims, which relate to UK patents.
Central to the Court’s reasoning were the commercial realities of SEP licensing. Referring to its decision in Unwired Planet, the Court emphasised that current market practice is highly relevant when interpreting the FRAND obligation. In particular, it pointed to (i) the growing use of licensing platforms across technical fields, (ii) Avanci’s own position that its platform rate is FRAND, (iii) the fact that a number of SEP owners already rely on the Avanci 4G platform to satisfy their FRAND obligations, and (iv) the recognised practical impossibility of implementers negotiating bilateral licences with every SEP owner contributing to a given standard.
The Court highlighted a number of factors supporting its reasoning that Tesla had established there was a serious issue to be tried in respect of its contention that the FRAND obligation applies to an offer to license jointly through a platform. It noted that, not only is the FRAND obligation undertaken by each patent owner as a condition of having the patented technology included in the relevant standard, there is also nothing in the ETSI IPR Policy that appears to suggest that the FRAND obligation falls away simply because a SEP owner chooses to offer a licence jointly with others through a platform agent such as Avanci. Indeed, it noted that the utility of the FRAND obligation would be severely compromised were it to cease to apply in circumstances such as those in the present case where numerous SEP owners controlling, as it was described to the Court, over 90% of the entire global stack of 2G–5G cellular SEPs have come together to offer licensing terms to the market. Interestingly, the Court was also persuaded by analogous competition law considerations, noting that the European Commission (which was closely involved in the drafting of the FRAND obligation) states in the Commission Guidelines on the application of Article 101 of the Treaty on the Functioning of the European Union that the creation and operation of a technology pool, including licensing out, generally falls outside Article 101(1), irrespective of the market position of the parties, if, among other things, the pooled technologies are licensed out to all potential licensees on FRAND terms.
The Court held that, while it was not persuaded by Tesla’s case that a SEP owner is required by the FRAND obligation to ensure that all offers of a licence (including a platform/pool licence) to the SEP are on FRAND terms, Tesla has a real prospect of establishing that the only FRAND licence for InterDigital’s UK SEPs may be a global platform licence covering the whole Avanci 5G platform at a FRAND rate. In this regard, it was relevant that Tesla contended that many SEP owners rely on the availability of platform licences as satisfying their FRAND obligations. The Court also noted that if, as a matter of commercial reality, commercial impracticalities prohibit the negotiation of bilateral licences with every SEP owner on the platform, then this is a powerful factor in support of Tesla’s case.
The Court emphasised the English courts’ broad inherent jurisdiction to grant, as a matter of discretion, such declaratory relief as would serve a useful purpose. It noted that such declarations have been shown to have particular utility in FRAND disputes, but declined to define by any series of propositions any guiding principles for the grant of the same. It was held that the threshold requirements for grant of the declarations were met in the present case, including because the declarations would serve a useful purpose in enabling an effective challenge to the platform rate. In that regard, it was considered that Avanci would likely reconsider its position if the FRAND rate for the platform was held by the English courts to be something lower than its current rate. In any event, the declarations would at least mean Avanci could not maintain that its platform rate is FRAND if it was held not to be so, and in such a case licensors on the platform could not rely on the platform licence as meeting their FRAND obligations. The Court also rejected InterDigital and Avanci’s procedural fairness objections, stating that it is not necessary for all SEP owners on the platform to be represented at this stage since Avanci is the essential party on whose expertise the SEP owners have already placed reliance in devising the appropriate royalty. Moreover, individual licensors would have the option to apply to join proceedings, which is merely a matter of case management.
Endorsing the Court of Appeal's reasoning in Vestel and the line of subsequent authority, the Court held that Tesla’s claims were properly characterised as claims about the terms on which InterDigital’s UK SEPs should be licensed, and hence the English courts have jurisdiction to hear those claims. That characterisation was not altered by Tesla’s contention that the only FRAND outcome might be a global licence, nor by the fact that UK patents represent only part of the wider platform portfolio. It was held that any other approach to the jurisdiction question would result in a striking, unprincipled and unsatisfactory asymmetry whereby a claim in the English courts for an injunction to restrain infringement of UK patents could be met with a FRAND defence in which a global FRAND determination was sought, but the equivalent claim filed proactively by an implementer seeking to stave off a threatened injunction to restrain infringement of UK patents would be characterised differently and the English courts would not have jurisdiction simply because it was the implementer who filed first.
The Court further held that the Delaware Court of Chancery was not an available alternative forum. It was considered that, in holding that Tesla had failed to show that the Delaware court was not an available and appropriate forum, the judge at first instance had mischaracterised Tesla’s claim as a global licensing claim rather than a claim for a licence on FRAND terms under the UK SEPs on the Avanci 5G platform. This led him to assess Delaware's availability against the wrong question. The Supreme Court, endorsing Arnold LJ's dissenting analysis in the Court of Appeal, accepted that the expert evidence established on the balance of probabilities that the Delaware courts would not adjudicate on the validity or infringement of non-US patents or a FRAND rate for non-US patents.
This decision represents a significant development for implementers, in particular those operating in fields where patent licensing platforms and pools are the typical mechanism by which SEPs are licensed. The decision confirms that offering licences via pools or platforms does not negate a SEP owner's individual FRAND obligations in respect of that offer. Also significant for implementers is the confirmation that they need not wait to be sued for infringement before challenging the FRAND status of platform/pool licensing terms – they can proactively seek declarations in the UK that an offer via a platform/pool is not FRAND and seek a FRAND determination in respect thereof.
The present case will now proceed in the High Court for determination of the substantive issues raised by Tesla, including what the FRAND rate for the Avanci 5G platform should be. We can also now expect to see other platform/pool rates being challenged by implementers or perhaps groups of implementers such as those forming licensing negotiation groups. As to the substantive issues in these FRAND determinations, it will in particular be interesting to see how the English courts apply their comparable licensing analysis in a platform/pool context, and how the commercial efficiencies benefitting both licensors and licensees in a platform/pool arrangement may be considered to impact what is FRAND as compared to a bilateral licensing arrangement.